World will eventually return to gold as the primary monetary reserve: Peter Schiff

By Jit Kumar
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Image by Steve Bidmead from Pixabay

With Covid-19 hyperinflation risk looming large in the US, the leading economist urges people to buy ‘gold, the real money’

Forget the US dollar. Buy gold or silver, that’s the real money, says Peter Schiff.

According to the noted American economist, the extreme measures taken by the US Federal Reserve like the unlimited currency printing to help the Trump administration combat the Covid-19 pandemic is actually pushing America into an episode of hyperinflation, “which is like a tax that will hurt society on all levels”.

Such a scenario, Schiff believes is a recipe for economic disaster that could eventually lead to the collapse of the US dollars as the global currency. So, he says that the precious yellow metal is the best bet in the post-Covid world and urges people to get rid of the dollars for gold and silver.

“Inflation is a tax, and it’s the most vicious tax because it hits the most vulnerable, it hits the lower class, the working poor, people who have savings, it destroys the value of a lifetime of savings…

“This ‘tax’ is also going to devalue fiat currencies, and investors should be holding onto physical gold and silver. So what you’ve got to do to mitigate the damage, your share of that inflation tax, is before the dollar collapses, get rid of your dollars and use them to accumulate real money, gold and silver,” he told Kitco News.

“All currencies are losing value right now and you can see that in terms of gold. In fact, gold has reached record highs in nearly every major currency except the dollar.. As the dollar loses value at an ever faster pace, gold will eventually supplant it as the de facto global reserve currency,” the CEO of Euro Pacific Capital stressed.

Not only gold or silver, Schiff has advised the more conservative investors to diversify their assets geographically. “In addition to having an allocation of physical gold and silver, you should invest in countries that have much sounder economies, that aren’t destroying their currency to the degree that we are so that you’re able to get a more reliable income stream.”

The global financial analyst has also come down heavily on the country’s central bank for the excessive printing of US dollars to boost the share market in this times of recession. “Instead the better solution would be dramatic reduction of government spending,” he said, adding the measures would help retain the value of the dollar.

“What the Fed would have to do to avoid hyperinflation is allow interest rates to rise sharply even though the economy is in recession and even though the stock market is tanking,” Schiff said.

Citing Sweden’s example, the market veteran said that the north European country has abandoned the clothes or shops model and instead allowed businesses to run but at the expense of public health. “Sweden, for example, has one of the highest infection rates per capita in the world, and we should have followed that model well,” he said in the interview.


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